EU launches probe into Hollywood film licensing

Hollywood film giants and some of Europe's biggest pay-TV networks face an EU investigation into claims they are breaking competition rules, the European Commission has announced.

In a statement on Monday (13 January), the commission said that it would investigate whether licensing deals for Hollywood films were leading to broadcasters "refusing potential subscribers from other member states or blocking cross-border access to their services."

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Warner Bros, Rupert Murdoch's Twentieth Century Fox and Paramount are among the film studios at the centre of the probe together with broadcast networks Sky - which Murdoch also owns a 39 percent stake of - Canal Plus and Spain's DTS.

In particular, the EU executive plans to examine cases where subscribers to a TV service in one EU country are blocked from watching films if they are in another country. Most films are licensed to a single pay-TV broadcaster on an individual country-by-country basis.

"We are not calling into question the possibility to grant licenses on a territorial basis, or trying to oblige studios to sell rights on a pan-European basis," said EU competition boss Joaquin Almunia.

An increasing number of Europeans use pay-TV services broadcast by satellite and online streaming on their computers but find themselves unable to watch programmes when they are outside their home country.

"We will also look at what happens to subscribers who holiday or spend time in a country outside their home country," said Almunia, adding that "absolute exclusivity can be anti-trust if it prevents competition."

Almunia added that the commission had not set a deadline for the case and would not "prejudge the outcome."

Reducing the capacity for single country licensing could lower the value of film rights.

The probe follows in the footsteps of the landmark ruling by the Luxembourg-based European Court of Justice (ECJ) on the licensing of football matches.

In October 2011 the court's Premier League/Murphy judgement found that giving absolute territorial exclusivity to a single broadcaster could be anti-competitive if it eliminated all competition between broadcasters and partitioned the bloc's single market along national borders.

The ECJ also ruled that English pub owner Sharon Murphy had not broken the law by buying decoder cards and subscriptions for Greek satellite channels showing the matches which were cheaper than subscribing to Sky Sports, which owns the rights to most Premier League games in the UK.

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